Niobrara Denver-Julesburg Crude Takeaway Expansions

SEMGroup White Cliffs Expansion - Source RBN Energy

SEMGroup White Cliffs Expansion – Source RBN Energy

Sandy Fielden, RBN Energy LLC, October 1, 2014

The Denver-Julesburg (DJ) Basin of the Niobrara shale in Northeast Colorado is one of the hottest crude plays around at the moment. RBN expects DJ Basin crude production to nearly double from 235 Mb/d in August 2014 to 450 Mb/d by the end of 2019 – an increase of 215 Mb/d. That growing production has sparked an infrastructure-planning spree with 4 pipeline project announcements in the last two months that could add a whopping 600 Mb/d of takeaway capacity from the DJ to Cushing by 2017. On top of that rail-loading capacity is also expanding in the DJ. Today we describe the new midstream expansion plans.

In Part 1 of this series we noted growing crude production in the Denver Julesburg (DJ) and Powder River Basin (PRB) plays in the Niobrara shale in Colorado and Wyoming – up 260 percent to 360 Mb/d since January 2012 and expected to double again by the end of 2019. Takeaway capacity from the region is congested because local Rockies production must compete with crude streams passing through the region from western Canada and North Dakota en-route to Cushing and points south.

The new 230 Mb/d capacity Tallgrass Pony Express pipeline from Guernsey, WY to Cushing OK, expected online in November 2014 (delayed by technical issues from starting in September as originally planned), should relieve pressure on capacity out of the northern Niobrara PRB play.  And the North East Colorado Lateral (NECL) to Pony Express, currently under construction and expected online in Q1 2015 will provide 90 Mb/d of new takeaway from the southern Niobrara DJ play to Cushing. Since we posted Part 1 last week, Tallgrass has announced plans to expand Pony Express, including the NECL with up to 400 Mb/d of additional capacity – 100 Mb/d in mid-2015 and the rest in 2016.

Meanwhile DJ takeaway expanded this summer when the SEMGroup White Cliffs pipeline from Platteville, CO to Cushing doubled in size to 150 Mb/d. In this episode we look at plans to add as much as another 600 Mb/d of pipeline crude takeaway capacity from the DJ Niobrara play – including efforts to address the need to segregate increasing production of condensate – as well as new crude by rail loading capacity.

Continue reading at RBN Energy LLC

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